1. Government and Laws
Chapter 6

2. Role of Regulators Protecting Consumers:
Most laws are designed to protect the safety, health, and welfare of individual
Occupational licensing
Hairstylists, electricians, accountants, home inspector, pharmacist
Health Department
Inspection of restaurants, daycare centers, sanitation

3. Federal Agencies: Protecting Consumers
Food and Drug Administration (FDA)
Regulates the labeling and safety of food, drugs, and cosmetics sold in the US
Approves new products
Reviews existing products
Banned dietary supplement, ephedra in 2004
Guidance in definitions
Food labeling, low-carb, low fat, organic
Adverse effects of ephedra consumption may include severe skin reactions, irritability, nervousness, dizziness, trembling, headache, insomnia, profuse perspiration, dehydration, itchy scalp and skin, vomiting, and hyperthermia. More serious potential side effects include irregular heartbeat, seizures, heart attack, stroke, and death. Used toward making meth. Also banned as a performance enhancing drug in sports.

4. Federal Agencies: Protecting Consumers
Consumer Product Safety Commission (CPSC)
Responsible for overseeing the safety of products
Electronics, toys and household furniture
NOT food, drugs, cosmetics, medical devices, tobacco, firearms, motor vehicles, pesticides, aircraft, boats, amusement rides
Sets standards for products and recall dangerous products
Businesses need to pay particular attention to safety, labeling, directions for safe use

5. Federal Agencies: Protecting Workers
Equal Employment Opportunity Commission (EEOC)
Responsible for the fair and equitable treatment of employees
Hiring, firing, and promotions
Enforces Title VII of the Civil Rights Act, Equal Pay Act, Age Discrimination in Employment Act, Title I and V of the Americans with Disabilities Act, and Civil Rights Act
Family and Medical Leave Act (FMLA)
Requires employers that qualify to grant eligible employees up to a total of 12 workweeks of unpaid leave during a 12 month period

6. Federal Agencies: Protecting Workers
Occupational Safety and Health Administration (OSHA)
Provides guidelines for workplace safety and enforces those regulations
Hard hats, reflectors, disposals, hazards training

7. Federal Agencies: Protecting Investors
Security and Exchange Commission (SEC)
Regulates the sale of securities (stocks and bonds)
Responsible for licensing brokerage firms and financial advisors
Investigates mergers and acquisitions (where it may affect stock)
Requires honest reporting

8. Social Responsibility and Business Ethics

9. Federal Agencies: Protecting the Environment
Environmental Protection Agency (EPA)
Protect human health and our environment
Responsibilities include monitoring and reducing air and water pollution, as well as hazardous waste disposal and recycling
Pollution controls: diesel engines
Acid rain, asbestos, lead poisoning, mercury, mold, ozone depletion, pesticides, radon
Advertising practices: no longer allowed to place advertising leaflets on vehicles

11. Social Responsibility
The idea that companies should embrace its social responsibilities and not be solely focused on maximizing profits. Social responsibility entails developing businesses with a positive relationship to the society which they operate in
Defining Social Responsibility - Investopedia

12. Social Responsibility
In the Workplace
Employees needs: flextime, telecommuting, family leave, on-site childcare, health care benefits, paid time off
In the Marketplace
Information reporting, employing self-censorship (avoiding controversy and keeping appropriateness)
Responding to consumer concerns (obesity)
In the Community
Support community efforts (funds, food drive, Toys for Tots)
Donate proceeds
Leaders in eco-efficiency, innovation
In the Environment
Cleaner fuel
Green Marketing: companies make an effort to produce and promote environmentally safe products

13. Business Ethics A major aspect of social responsibility Ethics
Guidelines for good behavior
Based on knowing the difference between right and wrong AND doing what is right
Takes into account the well-being of everyone

14. Ethics in Consumerism Consumerism Consumers have 4 basic rights:
The societal effort to protect consumer rights by putting legal, moral, and economic pressure on business
Shared effort by everyone
Consumers have 4 basic rights:
To be informed and protected against fraud, deceit, and misleading statements
To be protected from unsafe products
To have a choice of goods and services
To have a voice in product and marketing decisions made by government and business

15. Ethics in Marketing Self-regulation Being Proactive
Better Business Bureau (BBB)
Agree to follow the highest principles of business ethics and have a proven record of honesty
AMA Code of Ethics
“not knowingly do harm”
Includes “all relevant publics: customers, organizations, and society”
“products and services offered are safe and fit for their intended uses”
“disclosure of all substantial risks associated with product or service usage”

16. Ethics in Marketing Ethical Issues Related to Marketing Functions
Price Gouging – pricing products unreasonably high when the need is great or when consumers do not have other choices
During times of catastrophe
Some exclusions – pharmaceuticals
Management of marketing information
Privacy – Security over customer databases
Product and marketing research must report their findings honestly by disclosing all the facts involved
Selling practices
Bribes, kickbacks, favors, and high-pressure tactics used to close a sale - Cultural differences complicate

17. Managerial and Personnel Issues
Proper Accounting and Reporting
Sarbanes-Oxley Act of 2002
Reporting of a corporation’s financial situation are addressed and executives and consulting firms can be held accountable for misinformation
Whistle-Blowing
Involves reporting an illegal action of one’s employer
Personal ethics
Companies must have a policy in place for reporting

18. Guidelines for Ethical Behavior
Companies should have guidelines to help employees make ethical decisions
Decisions can be based on personal ethics rather than business guidelines and policies
To make the right ethical choices, employees at all levels should follow a decision making process that includes the following:
Get the facts
Identify all parties concerned
Think of all your alternatives
Evaluate your alternatives by asking yourself the following questions:
Is it in compliance with the law?
Does it go against company policy?
How does it affect everyone involved?
Is it right, fair, and honest?
Will it build good will for the company?
Am I comfortable with it?
How will it hold up to public scrutiny?

19. Quick Review
Name 6 employee benefits that demonstrate social responsibility in the workplace
What can business do in the marketplace to demonstrate social responsibility?
In the Workplace
Employees needs: flextime, telecommuting, family leave, on-site childcare, health care benefits, paid time off
In the Marketplace
Information reporting, employing self-censorship (avoiding controversy and keeping appropriateness)
Responding to consumer concerns (obesity)